Springfield, MO

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DISTANT LEGISLATING: Rep. Crystal Quade, D-Springfield, speaks at a nearly empty Missouri House of Representatives session April 8, in which legislators approved a $6.2 billion COVID-19 relief plan.
DISTANT LEGISLATING: Rep. Crystal Quade, D-Springfield, speaks at a nearly empty Missouri House of Representatives session April 8, in which legislators approved a $6.2 billion COVID-19 relief plan.

MSU, OTC attempt funding balancing act

Schools plans to use COVID-19 funds to help absorb costs

Posted online

Missouri State University and Ozarks Technical Community College each announced recent budgetary actions to deal with tightened state funding amid the coronavirus pandemic.

At MSU, a hiring freeze, halt to campus facility projects and dozens of staff members being reduced to two-thirds pay, are among the steps to address state budget cuts announced April 1 by Gov. Mike Parson. MSU will lose $7.6 million through the end of June, while OTC received a $1.15 million cut. It’s part of roughly $61 million in reduced funding to four-year colleges and $11 million for community colleges.

The OTC Board of Trustees approved an early retirement incentive plan and tuition hike for the 2020-21 academic year that Chancellor Hal Higdon said should allow the college to break even on the cut. Tier I classes, which are typically general education, will rise $4 per credit hour. Technical education and medical courses will increase by $3 per credit hour.

Officials from the institutions say they expected the state appropriations freeze.

“We were going to hold the line on tuition this year,” said OTC spokesman Mark Miller, noting the state funding cut changed that plan.

MSU Chief of Staff Ryan DeBoef said the university had been planning several weeks ago for the cut, as the coronavirus’ economic impact deepened for the state.

“We understand what the state has to do,” he said. “Unfortunately, when withholds come, there’s consequences to that campus. We’ve had to make a series of tough decisions and we’ll have to keep making other tough decisions.”

Both schools are hoping to utilize funds from the state’s recently approved $6.2 billion emergency funding bill in response to the COVID-19 pandemic. About $5.5 billion are federal funds, but less than half of that amount is currently promised to the state. An increase from the $40 million in COVID-19 relief funds initially approved last month by state lawmakers reflects federal funding officials hope to receive.

It also grants the governor authority to spend any federal COVID-19 funds as they become available.

MSU President Clif Smart said in an April 14 blog post while legislators authorized Parson the authority to distribute federal coronavirus stimulus funds, including $31 million for MSU, the school might not receive the money.

“If we receive any of these funds, they will likely have many strings attached,” he said in the post.

“They may also be combined with offsetting withholds, resulting in flat funding for Missouri State.”

Funding beneficiaries
The higher-education appropriation freeze was part of a larger $176 million budget cut for Missouri that was needed to balance the fiscal 2020 budget, according to state officials.

“The impact of COVID-19 has already been hard felt in our economy. More people are staying home, business operations have been limited, many people have lost their jobs and state revenues are down,” Parson said at an April 1 press briefing. “This has had a serious impact on our anticipated economic growth, so we’ve had to take a hard look at our budget and make some very difficult decisions.”

However, Missouri higher education institutions did recently get some good news.

They are beneficiaries of $206 million in allocated funding through the U.S. Department of Education from the Coronavirus Aid, Relief and Economic Security Act. MSU is set to receive over $13.8 million in Springfield and $960,000 in West Plains under the $2.2 trillion coronavirus relief bill. OTC is allocated nearly $8 million, with Drury University in line for $2.47 million and Evangel University getting $1.85 million. Funding tallies are based on a formula in the CARES Act, which factors Pell grant eligible students and the school population, among other things.

Half of the funding will be immediately available for schools to use as direct cash grants for students to cover expenses, including housing, course materials and health care. The remainder will be distributed at a later date to be determined.

“It’s that funding that’s going to help our students stay on their pathways to finishing their degrees,” DeBoef said. “That was a very critical piece of legislation.”

Drury spokesman Mike Brothers said the school plans to use a substantial portion of the funding to help reimburse students for room and board. Some funds will later be utilized to help cover costs associated with shifting classes online.

Budget challenges
OTC’s Higdon said the federal government has yet to provide guidance on how the college’s other $4 million in relief bill funding can be spent.

“My hope and prayer is they’ll let us spend it on the budget holes that COVID-19 has had,” he said, noting the college has no plans to cut employees. “We’re hoping they’ll be pretty broad with their definitions of how to spend it.”

At MSU, 133 campus facility projects have been postponed, while 65 full-time staff members were reduced to two-thirds pay through May to prevent immediate elimination of positions, DeBoef said. The moves help address the school’s budget shortfall.

Executive pay cuts also are planned. Smart’s $334,981 annual salary will be reduced 20% in May and June, DeBoef said, with other members of the leadership team, including vice presidents, deans, provosts and the West Plains campus chancellor, to voluntarily take 10% pay cuts for the next two months.

Officials at both schools say they’re concerned how higher education will fare when the state’s fiscal 2021 budget is determined. Legislators have a constitutional deadline of May 8 to finish work on the budget for the year beginning July 1. However, Parson said a special session might be required to complete it.

“They are working in uncharted territory, just like we are,” Higdon said. “They don’t know what money for sure they’re getting from the federal government; they don’t know when it’s coming and what strings are attached.”

DeBoef said it’s anticipated the state will have less money to work with over the next few months and into fiscal 2021. More cuts are likely as COVID-19’s impact continues.

“We are hopeful that if cuts become necessary that those cuts will be spread out across the budget,” he said.


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